By Josie Cox and Tommy Stubbington
A flurry of better-than-expected earnings boosted European equity markets Tuesday.
-- Live: Markets Pulse Stream
The Stoxx 600 Europe was around 0.6% higher in early trade. Germany's DAX rose 1.0%, the U.K's FTSE 100 added 0.6% and France's CAC-40 climbed 0.3%.
With the majority of earnings reports so far this season missing analyst expectations, investors broadly cheered figures from the likes of Deutsche Bank, Infineon and Hermès.
Germany's largest lender reported that its first-quarter net profit fell 24% to EUR1.1 billion, from EUR1.65 billion a year earlier, but above analysts' estimates of EUR927 million. Compatriot chip maker Infineon's revenue and earnings rose more than analysts had expected in the first quarter, and it reaffirmed its outlook, backed by a positive outlook on the global economy.
Demand for luxury goods in Japan, meanwhile, supported Hermès' first-quarter results. The French fashion group, famous for its handbags and printed silk scarves, said revenue rose 10% in the quarter.
In currency markets, the euro nudged higher following German regional data, which showed a pickup in annual inflation. Ahead of the key inflation report for the euro zone on Wednesday, the figures are likely to diminish expectations that further European Central Bank easing is imminent.
"In a nutshell, German inflation will remain tame but today's figures will show that the March collapse was not a sign that deflation was around the corner," said Annalisa Piazza, an economist at Newedge.
The euro climbed 0.2% against the dollar to $1.3872.
Other corporate heavyweights painted a mixed earnings picture on Tuesday. Italian energy company Eni SpA said first-quarter net profit slid 14% on the year, pressured by a weaker U.S. dollar against the euro, lower oil prices, greater losses from refining and chemicals activities and increased taxes. That, however, was largely expected by analysts, and therefore had little impact on shares.
Energy peer BP PLC also reported a fall in quarterly profit, but shares in the group gained too. On Monday, the oil major's stocks stumbled after the U.S. added the head of Russian state-controlled oil giant Rosneft to its sanctions list. BP holds a near 20% stake in Rosneft.
Elsewhere investors proved largely unperturbed by Monday's list of Russian sanctions. Moscow's MICEX was trading around 1.1% higher.
One of the few major losers on the Stoxx 600 Europe on Tuesday was French car maker Peugeot, due to start a EUR3 billion capital increase, which will pave the way for the French state and China's Dongfeng Motor Corp. to acquire sizable stakes in this country's largest auto maker.
The group is struggling to return to profit after racking up more than EUR7 billion of net losses in 2012 and 2013. On Friday, it reported that first-quarter revenue, constrained by the euro's strength, rose 1.9%. It left its medium-term earnings guidance unchanged.
Write to Josie Cox at firstname.lastname@example.org and Tommy Stubbington at email@example.com